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What is in a loss ratio?

Updated: 8/20/2019
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10y ago

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The ratio of losses paid to premiums earned, usually over a period of one year

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10y ago
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Q: What is in a loss ratio?
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Loss Ratio in insurance is the ratio of total losses paid out in claims plus adjustment expenses divided by the total earned premiums. If an insurance company, for example, pays out $60 in claims for every $100 in collected premiums, then its loss ratio is 60%.


How is ratio calculated?

Loss Ratio in insurance is the ratio of total losses paid out in claims plus adjustment expenses divided by the total earned premiums. If an insurance company, for example, pays out $60 in claims for every $100 in collected premiums, then its loss ratio is 60%.


What is the meaning of term claim ratio?

I'm not familiar with the term "term claim ratio." Did you mean "claim loss ratio?" If so, a claim loss ratio is the ratio between the amount of claims paid to the amount of policy premium. This can be done on either an individual insured basis, or on an entire "book" of business. Hope this helps.


How is a weighted loss ratio calculated?

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What does it mean when the accident year loss ratio is higher than the calendar year loss ratio?

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Ratio of the company's total net paid losses during the current year plus the change in loss reserves since the prior year end to the current year premiums earned.